Apple close to buying headphone maker Beats Electronics: FT

Thu May 8, 2014 6:47pm EDT
 
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(Reuters) - Apple Inc is close to buying headphone maker Beats Electronics for $3.2 billion, the Financial Times reported.

The purchase of Beats, which also runs a streaming music service, would be Apple's largest ever acquisition, the newspaper reported. It said the deal could be announced as early as next week. (r.reuters.com/cap77v)

Founded by rapper Dr. Dre and music producer Jimmy Iovine, Beats Electronics primarily produces products under the brand "Beats by Dr. Dre" and competes with headphones made by Skullcandy Inc, Sennheiser Electronic and Bose Corp.

"This is really puzzling," said Forrester analyst James McQuivey. "You buy companies today to get technologies that no one else … or customers that no one has."

"They must have something hidden … under the hood."

Apple-watchers have speculated that the company that upended the music industry - and today is the single largest seller of tunes - was contemplating a Spotify-like on-demand music service to go with its recently launched iRadio service and iTunes store.

Apple's Chief Executive Tim Cooks met with Iovine, the Beats CEO, last year on a potential partnership involving Beats' planned music-streaming service, Reuters reported in March, citing sources.(r.reuters.com/ter29v)

Dre - who guided the careers of a string of rap artists such as Eminem and 50 Cent - compared his company with Apple in 2011.

"We're trying to eventually be second to Apple. And I don't think that's a bad position," Dre told The Fader music website.(r.reuters.com/cur29v)   Continued...

 
Recording artist Dr. Dre wears a pair of Beats headphones as he attends the MLB 2010 season opener between the New York Yankees and Boston Red Sox at Fenway Park in Boston, in this file photo taken April 4, 2010. REUTERS/Adam Hunger/Files